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Tuesday, 19 June 2001
Page: 27950

Mr LLOYD (4:00 PM) —It is indeed a pleasure to have the opportunity this afternoon to make some comments on Appropriation Bill (No. 1) 2001-2002 and the budget which the government has brought down. Before I go through some of the initiatives that have been introduced in the coalition government's recent budget, I remind honourable members and the Australian community of the work that has gone into building the economy and building a position where we can provide budget surpluses, and to remind the community of what we inherited after 13 years of Labor government. The Labor Party hopes that everyone has short memories; they want us to forget what they left the coalition government to deal with when we came to office in 1996.

Labor's record, after 13 years in government, is a record that they cannot be proud of. During that period we saw home interest rates rise to over 17 per cent. We saw unemployment, under the then employment minister, Mr Beazley, rise to 11 per cent. They presided over falling wages. They actually boasted that they were happy that they had enabled workers' wages to fall. They were the ones who introduced indexation of fuel taxes. They do not want us to remember that. They were very quick to promise things like tax cuts—the l-a-w tax cuts—but they never delivered on those promises. After the 1993 election, as soon as they were back in office, they hiked up all the wholesale sales taxes—indirect taxes—despite promising there would be no new taxes. That is what the coalition government inherited when we came to office in 1996.

We also inherited a deficit of $80 billion. A figure of $80 billion rolls easily off the tongue, but if governments continue to keep borrowing money and putting this country further and further into debt, it has an impact on the whole economy, including on interest rates, and it has an impact on families and communities. The coalition government set about managing this country in a responsible way, to be sound financial managers and to reduce that deficit.

With the sixth coalition budget, brought down by Treasurer Peter Costello, we have now repaid almost $60 billion of the Labor Party debt of $80 billion. In my view, we have set the parameters for a period of continued growth, continued strength and, hopefully, continued prosperity for the Australian community. We all know in our daily lives that if we continue to run up the Bankcard, we end up paying interest on the debt that we have. It is interesting that when we first came into government in 1996 the government was paying out $4 billion in interest—$4,000 million in interest. That is a huge amount of money that is just wasted money. At that time, $4 billion was equivalent to what we were spending on education; it was equivalent to what we were spending on many important areas of government.

We have been able to reduce that deficit—which I believe actually blew out to $96 billion; $80 billion was accumulated in only the last five years of the Labor government—so it really shows that the previous government were not managing the economy very well and that they were certainly throwing the economy further into debt. By saving the money on interest—which really was wasted money—we have been able to put it back into the community. In the last budget we have actually been able to provide some initiatives and some dividends to the people of the Australian community, who really are, after all, the shareholders of the Australian economy.

The Australian community can now start to see some of the benefits of the initiatives that we have been able to implement because we have put this economy back into the black and because we have managed this economy well. I recall that when we were first elected to government in 1996—and I am pleased to see that my colleague the member for Parramatta has just joined me in the chamber, and he will also recall—it was difficult because we had to get out and sell our plan for this country. We had a vision of where we wanted to take this country and its people.We did not have a track record to do it, so we had to get out there and we had to sell it. We had to actually say to people, `Trust in what we are doing. You will have to believe that what we want to do for this country is better for the future of this country,' and ask them to trust us to deliver that.

Now, some 5½ years later, when we go out into the community, we do have a track record to rely on. I am very proud to be part of a government that has made the hard decisions to give us the future that this country deserves. It has not been easy, but we can now stand up proudly to the Australian community and they can make a judgment on what we have done over the last 5½ years. I am very confident that when we go back to the Australian people some time this year that we can do so with a track record which is strong, a track record that shows a government that has been able to introduce tax reform—tax reform which the members opposite knew had to be introduced. They have known for many, many years, but the Labor Party did not have the guts to introduce it.

Mr Ross Cameron —What about option C?

Mr LLOYD —That is just one reform that we introduced. We made changes to industrial relations to ensure that people could be employed easily. Making those hard decisions, repaying debt and keeping interest rates low were things that the Australian community wanted us to do. Now we have that track record and I am very proud to be part of the government. I know that the member for Parramatta and I look forward to going back to the Australian people later this year and putting that track record to the Australian community.

Because we have paid off so much of the deficit and because we have managed the economy well we are able to give back some of the dividends of that sound financial management to the Australian community. Just one example of that is the $300 one-off payment for people of pension age who receive income support or who are outside the taxation or social security systems. This is an important recognition of those people of pension age—older Australians—who have made a contribution to Australia. It is interesting that the Labor opposition tries to make out that somehow this is compensation for the GST. It is not compensation for the GST.

Mr Gibbons —There is no compensation for the GST.

Mr LLOYD —Members opposite say that there is no compensation for the GST. I will come back to that point because there certainly is compensation for the GST. This is not compensation for the GST. It is a recognition of what those older Australians have done for the Australian community. It is only fair and just that if a government is in a position, through sound financial management, to give something back to the Australian people then they should do so.

The members opposite said that there was no compensation for the GST. I had the opportunity to go to a presentation at the Parliamentary Library recently. It was put on by Econtech, an independent modeller who looked at the new tax system, at how it has turned out and at the percentage rise from March 2000 to March 2001. I have a table which shows very clearly that over that period the CPI increased by six per cent, that after-tax wages increased by 8.2 per cent but that the age pension also increased by 8.1 per cent. This shows very clearly that pensions have not only kept pace with inflation but also that they are 2.1 per cent above the cost of living. These are not the government's figures. They are figures of an independent modeller—Econtech—and it shows that pensions are well above the cost of living.

Since the introduction of the GST on 1 July, single age pensions have increased by $15 per week, or $30 per fortnight, from $372 to $402 per fortnight. You will hear the Labor opposition and often the media producing comments from people such as, `I don't think the $3 a week compensation that I got in my pension is enough to compensate.' I repeat: since the introduction of the GST on 1 July single age pensions have increased by $30 per fortnight - from $372 per fortnight to $402 per fortnight. I realise that living on the age pension is difficult. I can assure members that there is not a lot of money to spare. But it is important to emphasise that people have been compensated for the GST, and that pensions are 2.1 per cent higher than the cost of living. Not only do they continue to be higher than the cost of living, but they are indexed to increase twice a year as costs go up—and it was a coalition government that introduced legislation to ensure that pensions were always maintained at 25 per cent of male weekly earnings, to protect pensioners. It took a coalition government to do that.

Mr Ross Cameron —We care about older Australians.

Mr LLOYD —We certainly do care about older Australians. We should realise that this is the government's fifth consecutive budget surplus.

Mr Ross Cameron —It is an outstanding budget saving.

Mr LLOYD —It is an outstanding track record, and it is securing Australia's future. We have saved $4 billion in interest payments every single year. That money can be used for roads, for education, for hospitals. The states were falling over themselves to sign up for the GST. Once again the Labor opposition does not want to remind people that the state governments get every cent of the GST. It is a GST windfall to the states, which fund the hospitals and the schools. We have been able to give them a funding mechanism which will ensure that their funding base will continue to keep pace and that they will able to supply the hospitals, the schools and the police that the community demands and knows they should be able to supply.

Since the coalition came to office in 1996, we have created more than 820,000 jobs. Over the three years to mid-2000, Australia has enjoyed a record period of sustained economic growth, with unemployment falling to the lowest levels in over a decade. And economic growth is set to rebound in 2001-02. Again, however, we hear comments from the Labor opposition at different times that the downturn was `home grown'. It is an absolute disgrace that, when we had the negative growth figures in December, members of the Labor opposition were running around this country talking down the economy. They were doing everything they could to talk the economy down. They wanted to see two periods of negative growth, which would then be a technical recession. I do not think I have ever seen the members opposite so crestfallen as when the March quarter figures were released, at 1.1 per cent growth in Australia, showing that the economy had rebounded to positive territory. They were absolutely disappointed that the Australian community had not succumbed to their continual talking down of our economy. It is a credit to Australian small business people and consumers that they did not believe the campaign of scaremongering.

While they were talking about this so-called recession—and it was not even a recession— you heard them saying, `This recession is home grown.' Here in Australia we are now starting to power ahead again after we had the transitional period of introducing the new tax system— which everyone knew we had to do—in an environment where most other major countries in the world are having difficulties at the moment. And they are trying to say that this downturn is home grown.

When the Asian crisis occurred a couple of years ago, the Labor Party were running around saying, `Australia is going to be swept up in the Asian crisis! We will all be ruined!' They were trying to scare everyone again.

Mr Ross Cameron —A'wishin' an' a'hopin' an' a'thinkin' an' a'prayin'!

Mr LLOYD —As the Treasurer said, yes. They were really trying to talk down the economy. The reason we were not swept up in the Asian crisis was because we had already addressed most of the Labor Party's debt. If we had still been running huge deficits at that time and if we were not running surplus budgets, the international community would have looked very poorly on Australia and we would have been swept up in the Asian downturn.

The other reason that we were not swept up in it was the innovation of our exporters. We are a major exporting nation. If you listened to the Labor Party, you would think that we do not make anything and we do not export anything. We are a major exporting nation. Under the previous Labor government there was this single focus on Asia only, but Australian exporters are very innovative and they were able to diversify and expand markets through Europe, England, the Middle East and into America, and really we were able to tackle the Asian economic crisis head-on. To all intents and purposes, the economy in Australia never missed a beat. The community did not feel any downturn to any significant degree at all during that Asian crisis. It just shows how important sound economic management is.

Because we have now been able to put our budget into surplus again, we have got money that we can now put into initiatives that I think are very important for the Australian community. One initiative that I want to mention was not detailed in the budget as such but, because of the budget position, we were able to bring forward a package to support cadets, as part of the Defence 2000 white paper. This initiative to significantly boost the Australian cadet service is something which has been very well received in my community. To put $30 million back into the cadet service sends a strong message to the Australian community and to the young people of Australia that the cadet service is something that we should be proud of.

The Whitlam government wound down the cadet service and really starved it of resources. Under the new package, the cadets now will have the resources that they need; they will be able to go out and promote what cadets are all about. On the Central Coast, we have three excellent cadet units, including the TS Hawkesbury naval cadets, who I identify closely with, having a ship's master certificate myself and having spent a number of years in command of a ship which had a young crew of 28 people.

I have worked very closely with TS Hawkesbury. We also have the 229 regional cadet unit, and the air cadets up at Erina. They have now been able to expand, and this sends a message to young people that they can be proud of themselves, that there is nothing wrong with discipline and enjoying yourself and being proud of being in uniform.

There was some criticism about the fact that the cadets might have access to weapons. I wondered about that criticism, because some of it was as though we were going to hand out guns to young people and they were going to take them home and wander down the street with them. The criticism was crazy. If people are going to join the cadets, part of their training is to learn about weapons and how to use weapons. All this sort of training would be under very strict guidelines. I was a member of the army cadets at school, back in the days when many of the schools had army cadets.

One of the most enjoyable parts of being in the cadet unit was when we were able to go out onto the rifle range and fire the old 303s, which had a fair kick in them at that time. But it was under strict supervision. I do not think that it turned me into a Rambo, but it certainly gave me an understanding of weapons and how to use them safely. It was a very important part of my life and certainly enabled me to understand what it is like in the military and to have some sort of chain of command and some pride in myself as a young person. One of the other things which I am very pleased we were able to do in this budget as part of the new tax system was to drop the company tax rate from 34 per cent to 30 per cent. The full input tax credits for motor vehicles, which have been brought forward to 23 May on the announcement of the budget— (Time expired)

Mr DEPUTY SPEAKER (Mr Nehl)—Before I call the next speaker, I must say that it is beyond conjecture to even try to imagine the member for Robertson as Rambo.